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International Journal of Marketing and Technology

Vol. 7 Issue 8, August 2017,

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29 International Journal of Marketing and Technology

http://www.ijmra.us, Email: [email protected]

Importance of Cement Industry in India

Dr.Anjoo Pandey

Cement industry is the second most important primary and basic industry for the economic

development of India, second only after iron and steel industry the cement industry is basic industry and

makes an important contribution to the development of the other factory industry, to the construction

and even to the development of agriculture. Cement is required by every industry cement is an important

part of industrial infrastructure. It provides direct and indirect employment to a large number of persons

and contributes a major part to Gross Domestic Product (GDP).

Cement is a key infrastructure industry. However, the performance of the industry and prices of

cement are monitored regularly. The constraints faced by the infrastructure coordination committee

meetings held in the cabinet secretariat under the chairmanship of secretary (coordination) its

performance is also reviewed by the cabinet committee on infrastructure.

History of Cement

It must be interesting to know how cement is made today Vis a Vis the historical background. Ever since

civilizations stepping in the earth, people sought a material that would bind stones into a solid, formed

mass. The Assyrians and Babylonians used clay for this purpose, and the Egyptians advanced to the

discovery of lime and gypsum mortar as a binding agent for building such structures as the pyramids.

The Greeks made further improvements and finally the Romans developed cement that produced

structures of remarkable durability. The secret of Roman success in making cement was traced to the

mixing of slaked lime with pozzolang, a volcanic ash from Mount Vesuvius. This process produced

cement capable of hardening under water. During the middle ages this art was lost and it was not until

the scientific spirit of inquiry revived that we rediscovered the secret of hydraulic cement that will

harden under water. Most of the building foundations in the Roman forum were constructed of a form of

concrete, placed in some locations to a depth of 12 feet. The great Roman baths built about 27B.co, the

coliseum, and the huge Basilica of Constantine are examples of early Roman architecture in which

cement mortal was used.

Portland cement today, is a predetermined and carefully proportioned Chemical Combination of

calcium, silicon, iron, and aluminum. Natural cement gave way to portland cement, which is a

predictable, know product of consistently high quality. Aspdin established a plant in Wakefield to

manufacture Portland cement, some of which was used in 1828 in construction of the Thames River

Tunnel. But it was almost 20 years later then J.D. White and sons set up a prosperous factory in Kent




that the portland cement industry saw its greatest period of early expansion not only in England, but also

in Belgium and Germany. Portland Cement was used to build the London sewer system in 1859-1867.

Thomas A Edison was a pioneer in the further development of the rotary kiln. In 1902, in his Edison

Portland cement works in new village, not, he introduced the first long kilns used in the industry - 150

feet long in contrast to the customary 60 to 80 feet. Today, some kilns are more than 500 feet long.

Parallel improvements in crushing and grinding equipment also influenced the rapid increase in

production. Since grinding process consumes most of the energy various grinding systems like ball

mill/vertical roller mill Roller presses has been the result of technological developments.

Origin and development

In India cement industry has a very late start. The first cement factory of India was established in

1904 in Madras, the real beginning of the industry was in 1912-13, when three cement factories were

established at Porbandar (Gujarat) Katni (M.P.) and Bundi (Rajasthan). The first world war gave the

industry a great stimulus, since the demand for cement for was purposes shot up. Accordingly, its

production rose from 945 tonnes only in 1914 to 84,300 tonnes in 1918. In the inter war period several

new cement companies were floated which resulted in over production and price - war among them led

to a large losses being incurred. Since protection was denied to the industry, the cement companies

formed themselves into a cartel and established by agreement unified control over production and prices.

The Indian cement manufacturers' association was formed in 1926 with a view to restricting the output

and regulating the sale of cement. In 1936, Associated cement companies limited (ACC) was formed by

the merger of 10 principal cement companies. This combine was threatened in 1936-37 when several.

Dalmia Group factories were established with an installed capacity of 5 to 7.5 lakh tonnes a year in

1937.

In 1947, when the country was partitioned, the number of cement manufacturing factories was 23

with a capacity of 2.2 million tonnes: Five of them fell in the jurisdiction of Pakistan, the other 18

remaining with India aggregating with an annual capacity of 1.5 million tonnes. The cement

manufacturing capacity increased to 3.28 million tonnes by 1950-51, when the country ushered in her

planning era. During planning period, the cement industry has recorded continuous growth. India not

only became self reliant at the end of seventh plan but also started export of cement. At present cement

is the most advanced industries in the country. After the complete decontrol of price and distribution on

March I, 1989, and introduction of other policy reforms, the cement industry has made rapid strides both

in capacity/production and production process technology. As on April 30, 2003, these were 124 large

cement plants with an installed capacity of 140.02, million tonnes per annum. Besides there are more

than 300 min cement plants with an estimated capacity of 11.10 million tonnes per annum. The cement

production during 2002-03 was 116.35 million tonnes with a growth rate of 8.84%. All restrictions on

cement prices and distribution have been removed since March 1, 1989 under New Industrial Policy

Resolution 1991, cement Industry has been made license free.

Export of cement was 6.92 million tonnes in 2002-03. Improvement in the quality of Indian

cement has found its ready markets in Bangladesh, Indonesia, Malaysia, Nepal, Middle East Countries

Burma, Africa, and South East Asian countries.




Definition of cement

Cement can be defined as any substance which can join or unite two or more pieces of some

other substance together to form a unit mass; cements, as used in construction industries, is a fine

powder which when mixed with water and allowed to set and harden can join different components or

members together to give a mechanically strong structure. Thus, cement can be used as a bonding

material for bricks or for bonding solid particles of different sizes (rubble masonry) to form a monolith.

Making of cement

Two main methods of cement manufacturing were prominent, the dry process and wet process.

Dry process now has almost replaced the wet process since wet process consumes high thermal energy

for drying moisture. When rock is the principal raw material, the first step after quarrying in both

processes is the primary crushing Mountains of rock are fed though crushers capable of handling pieces

as large as an oil drum. The first crushing reduces the rock to a maximum size of about 6 inches. The

rock then goes to secondary crushers or hammer mills for reduction to about 3 inches or smaller. It is

then ground in ball mill to fine powder with after ingredients like clay/iron ore/ bauxite to create a

combination of values for silica / alumina / lime etc. in the mixture. If the process is wet, the grinding

goes on in with water so that a slurry is resulted after grinding. This slurry further mixed in mixers and

pumped to the kiln. For a dry process kiln, the ground powder is send to blending silos for uniform

mixing of components added during the grinding stage. This blended material is feed to the

preheater/calciner. The preheater is a group of cyclones placed over one another where in material

comes down and hot gases goes up heating the material and Calcining it in the process calcination

means liberating carbon-dioxide and converting calcium carbonate to calcium oxide calciner is nothing

but a duct added to give more residence time to material for calcination. This partially calcined material

then comes to the kiln, which is Refactory lined rotating tube having burner fitted in the other end. This

burner fires (cool/oil/natural gas to create a temperature of 1600 Deg. centigrade at the discharge end, as

the material in the kiln rolls down towards the discharge end, various reactions takes place amongst the

components resulting in a mass, known as clinker. This clinker is then cooled in coolers. The coolers are

either planetary type or grate type grate coolers of modern times are much efficient resulting in better

heat recuperation and allows reusing this heat in the kiln. The cooled clinker then either goes to storage

silo or clinker yard. From the clinker yard it is taken for grinding.

In case ordinary portland cement is made only gypsum (4-6%) is added before grinding. In case

of portland pozzolana cement additives like flyash/brick etc. are added Grinding again is same like for

raw material grinding with ball mill or with latest technologies like verical mill/ Roller press etc. The

cement powder is then taken to packing plant or discharged from silo to a bulk loader directly.

Types of cement

The cements coming under the category of Portland cements are also known as "Hydraulic

Cements", because they, when mixed with water have the property of setting and hardening under water.

Starting with hydraulic limes, which also when mixed with water, set and harden under water, as




apposed to fat limes which do not harden under water, there are various types of Hydraulic Cements, a

brief description of which is given below:

(i) Hydraulic Lime:- Early impure limestone when burnt in ordinary stack kilns and the burnt lime

cooled and hydrated or slaked, gives hydraulic lime. The clay matter impurites in the limestone may be

as high as 25%, but the clay matter should be very intimately disseminated in the limestone. The silica,

alumina and iron-oxide present in the clay combine to some extent with the lime present in the limestone

to form silicates and aluminates which impart the hydraulic properties to the product.

(ii) Natural Cement :-

Natural cement is also made by calcining impure, limestone, but the burnt material is cooled,

ground and packed. There composition is more stringent than hydraulic limes and their manufacture

entails better control during the process of manufacture. However use of both hydraulic limes and

natural cement is now going down.

(iii) Portland Cement :-

Portland cement are made by grinding a mixture of limestone and clay matter, burning the

mixture at a very high temperature cooling the resultant product, called "clinker", and grinding the same

to an impalpable powder. Essential constituents are lime, silica slumina and iron oxide. Some gypsum is

added during the final grinding operation. Portland cement types are divided into seven classes, as

described later, but the method of manufacture of all the type is practically the same, they very only in

chemical composition to impark the desired properties of a particular type.

(a) Ordinary Portland Cement (OPC):- The ordinary Portland cement is popularly known as grey

cement which is produce by grinding clinker with 5% gypsum. It is used in all general concrete

construction, mass and reinforced concrete. It accounts for about 70.60% of the total production.

(b) Modern Heat Portland Cement (MHPC):- By changing the chemical composition of the

cement some what, the heat of hydration can be lowered, and this type of cement is called Moderate

Heat cement. This type of cement is also somewhat more Sulphate resistant than OPC.

(c) Rapid Hardening Cement (RHC) or High Early Strength Cement (HESC):- As said in

above, ordinary Portland Cement develops the desired strength at 3 days, 7days and 28 days; but

sometimes a cement is required which should give as high a strength in 24 hours as is given by ordinary

Portland Cement at 3 days, this type of cement is called Rapid Hardening Cement or High Early strength

cement.

(d) Low Heat Portland Cement (LHPC):- All the above three types of cements have a fairly high

heat of hydration. For large mass concrete work in dams, piers, etc., it is necessary to have a much lower

heat of hydration, so chances of developing contraction cracks later are minimised. This can be done by

either adding some Pozzolonic material or granulated blast furnace slag to the cement while grinding or

by changing the chemical composition of the cement in such a way that the heat of hydration is reduced.

Thus the chemical composition of LHC is so modified add to give a heat of hydration lower than the

maximum specified.

(e) Sulphate Resisting Cement (SRC):- A Portland Cement with less than 5% C3 A is highly

resistant to sulphatic action and is known as sulphate resisting cement.




(f) Oil Well Cement (OWC):- It is made from clinker with special additives to prevent any

porosity. Oil wells are drilled to depths of 4000 metres or more, and, after the drilling operation is

completed, they have to be lined with an annulus made of cement concrete. The temperatures at such

depths are high - 1000C and higher.

(g) White Cement (WC):- Basically it is OPC clinker using fuel oil (instead of coal) and with

iron oxide content below 0.4% to ensure whiteness. Special cooling technique is used. It is used to

enhance aestheic value in tiles and for flooring white cement is much more expensive than grey cement.

(iv) Blended Portland Cement:- There are certain natural or man-made inorganic complexes which,

when mixed with Portland cement clinker (or lime) and ground finely, gain cementations properties and

made the resultant cement more suitable for certain jobs. These complexes are.

(a) Pozzolona (b) Slag, (c) Limestone, Sandstone, etc.

Addition of each of the above admixtures to Portland cement clinker gives a different type of

cement with special properties such cements can be named Blended Portland cements. The type of

blended Portland cement are as follows:-

(a) Portland Blast Furnace Slag Cement (PBFSC)

(b) Portland Pozzolana Cements (PPC)

(c) Masonry Cement (MC)

(v) Special Cements:- Some special cements, with Portland cement as base, have been developed

which have very special properties and special uses. The type of special cement is as follows:-

(a) Expansive Cement or Shrinkage Compensate Cement

(b) Super high -strength cement

(c) Alinite Cement

(d) Special High C2S Cements

(e) Water proof cement

IMPORTANCE OF CEMENT INDUSTRY

(1) Centralization of ownership:- In no other industry of India is there greater centralization of

ownership and control than in the cement industry. The public sector, the A.C.C., the Dalmia Jain and

the Birlas control bulk of the cement units. The centralization of ownership and control has inevitably

led to the financial and administrative integration of different cement factories, thus exerting profound

influence on the size of individual units.

(2) Diversified over the country:- The industry is well diversified over all the states of India since

the manufacture of cement requires weight losing materials like limestone or chalk, clay and gypsum,

the industry has a tendency to be attracted at the point of minimum transportational costs in relation to

raw materials. Limestone of excellent quality exists in abundance in many parts of the country, and in

close proximity of railway lines so that industry shown a tendency of regional dispersal of productive

activity. But as late as 1980, Cement factories were largely concentrate in the southern and western

regions of the country.




CMA ACTIVITIES

During the period (December 2003- March 2004) Cement Manufactures Association (CMA)

Continued its effort in respect of promoting construction of cement concrete Roads in Rural and urban

areas.

Highways

1. Golden Quadrilateral/ North- South and East- West corridor by NHAI:- Satara - Kolhapur NH-4

section, about 130km Long, is under construction on Golden Quadrilateral as Build, Operate and

Transfer (BOT) Project. This project is having the new carriageway with concrete pavement having up

to 30% replacement of cement with fly ash. This is the first major concrete pavement to use fly ash in

concrete for first time in India in a length of about 60 km.

2 Maharashtra Golden triangle:- A pre- Kolhapur NH-4 Meeting was help in November 2003 by

Ministry of Road Transport and Highways (MORTH) for the 7 packages identified by them to award on

BOT basis construction of road section of Mumbai Nasik NH-3 is one of these packages. There after this

project has been transferred to National Highway Authority of India (NHAI) for implementation. It is

learnt from NHAI that after studying the tender document in reference to the pre-bid meeting, some

amendment to the tender document has been issued recently and tenders will now be called for

submission.

3. Urban Roads in cement concrete Bypass at Gauriganj Uttar Pradesh:- Uttar Pradesh Government

has sanctioned the Bypass at Gauriganj Project with high volume fly ash (HVFA) concrete on equal cost

basis by up Government and ACC A draft Memorandum of understanding (MOU) has been sent by

ACC to Engineer in chief, PWD for approval. A meeting to finalise the MOU was likely to be held in

March 2004.

After signing the MOU, ACC and PWD will take further action for construction of the road.

The concrete mix design with HVFA has been designed in laboratory by ACC limited in

Mumbai and now a trial length is being laid inside plant at Takaria in March 2004 contract for

construction of this road is expected to be concluded soon after signing of mole and approval of estimate

by UP Govt.

4. Construction of two Roads in Municipal limits of Surat with concrete pavement:- Tenders have

been invited from the prequalified contractors by the Surat Municipal corporation (SMC). It is learnt

from consultants that tenders have been received by SMC and being finalised for issuing award letter.

5. Rural Road in cement concrete Pilot project under PMFSY:-

Detailed Project Reports (DPR) for the Chhattisgarh, Andhra, Pradesh, Rajasthan, Gujarat, Orissa,

Punjab, Madhya Pradesh, Tamil Nadu, Maharashtra and Assam were approved by the respective State

Technical Agency (STA) and submitted to National Rural Road Development (NRRDA) for approval

and release of funds DPRS for Karnataka has been submitted to STA approval is awaited.

List of Uttar Pradesh Roads has been received by National council for cement and Building

Materials (NCB) from NRRDA NCB is going to select 4-5 roads after site visit.

Empowerment committee Meeting in NRRDA for approval of DPRS was held in January2004.

Most of the members were convinced with the cost of roads except Addl. Secretary (MORS), who was




of the view that cost of these roads is high, compared to the cost being approved for various states

Director (Tech), NRRDA explained to the committee that these roads have been selected to demonstrate

the performance of concrete roads in worst situations and cost of bituminous roads is generally higher in

such conditions Secretary RD asked NRRDA to review the cost once again and try to reduce as much as

possible. Review of cost estimates for both types of pavements made by consultants NCB in February

2004 and revised cost has been submitted to NRRDA for approval of cost and release of funds. Average

cost of bitumen road per km. is about Rs. 24.9 Lakh and concrete road Rs. 31.06 Lakh i.e. 24.7% extra.

CEMENT PRODUCTION

Cement production in 2004-05 is expected to show a higher growth of six per cent as compared

with 5.5 per cent increase recorded in the previous fiscal. Till October 2004, production has already

grown by a healthy 6.3 per cent as compared with a 5.1 per cent increase in the corresponding period of

2003. After witnessing a poor growth till August, Production picked up in September and October,

growing by 11.7 per cent and 14.12 per cent respectively.

A similar performance was demonstrated in cement consumption. Till August of the current

fiscal year, consumption was up by three per cent. But in subsequent months of September and October

it grew by 11.1 per cent and 17.3 per cent respectively. As a result, cumulative growth during April-

October 2004 reached 6.4 per cent as compared with 4.2 per cent in the same months of 2003.

The impressing performance of cement industry in the recent months could be attributed to

depressed prices and revival of construction activities in the post monsoon months. All the major zones

of the country recorded healthy consumption growth in October barring the southern zone where the

growth was modest 3.8 per cent. The demand has reportedly come from housing rather than

infrastructure.

Cement production and consumption witnessed improvement in year on year growth in

September 2004. During the month production grew by 11.5 percent as against 6.1 percent increase in

September 2003. Because of this, production growth during April - September 2004 worked out to a

healthy 6.1 per cent as compared to a dismal 3.6 per cent till August. This growth also compares

favorably with 3.8 per cent increase recorded in the corresponding period of 2003. Cement consumption

was up by 4.2 per cent in September 2004. After growing by 15.3 per cent in April, Consumption

witnessed year on year decline in three of the four subsequent months. Cumulative cement consumption

during April-September 2004 showed a 4.6 per cent increase, fractionally higher than the 4.4 percent

growth achieved in the corresponding period of 2003.

The impressive performance of cement industry can be attributed to a consistent fall in cement

prices since May 2004 and an increase in construction activities due to poor monsoon in September.

Cement consumption went up in all the zones of the country in September. Exports and capacity

utilisation also showed healthy growth during the month. Cement exports went up by 36 percent owing

to increased demand from gulf countries.

The Indian cement industry is on a roll. Riding on increased activity in real estate, cement

production has registered a growth of 7.24 per cent in April, 2005, at 11.41 million tonnes as against

10.49 million tonnes in the corresponding period a year ago.




The growth trend has been on for some time now. In the April-January 2004-05 period, the

sector registered a rise of 7.1 per cent, producing 108.06 million tones. If these trends are anything to go

by, it will not be long before the sector meets the production target of 133 million tonnes set by the

government in the fiscal 2004-05.

During the tenth plan, the industry, which is ranked second in the world in terms of production,

is expected to grow at 10 per cent/annum adding a capacity of 40-52 million tonnes, according to the

annual report of the Department of Industrial Policy and Promotion (DIPP). The report reveals that this

growth tried is being driven mainly by the expansion of existing plants and using more fly ash in the

production of cement.

CAPACITY AND PRODUCTION OF CEMENT INDUSTRY

Cement is a key infrastructure industry. It has been decontrolled from price and distribution on

1st March, 1989 and delicensed on 25th July, 1991 However, the performance of the industry and prices

of cement are monitored regularly. The constraints faced by the industry are reviewed in the

Infrastructure Coordination committee meetings held in the cabinet secretariat under the chairmanship of

Secretary (coordination). Its performance is also reviewed by the Cabinet committee on Infrastructure.

The cement industry comprises of 125 large cement plants with an installed capacity of 148.28

million tonnes and more than 300 mini cement plants Corporation of India, which is a Central Public

Sector Undertaking, has 10 Units. There are 10 large cement plants owned by various State

Governments. The total installed capacity in the country as a whole is 159.38 million tonnes. Actual

cement production in 2002-03 was 116.35 million tonnes as against a production of 106.90 million

tonnes in 2001-02, registering a growth rate of 8.84%.

Keeping in view the trend of growth of the industry in previous years a production target of 126

million tonnes has been fixed for the year 2003-04 during the period April-June 2003, a production

(provisional) was 31.30 million tonnes. The industry has achieved a growth rate of 4.86 per cent during

this period.

Exports :- Apart from meeting the entire domestic demand, the industry is also exporting cement

and clinker. The export of cement during 2001-04 was 5.14 million tonnes and 6.92 million tonnes

respectively. Expert during April May, 2003 was 1.35 million tonnes. Major exporters were Gujarat

Ambuja Cement Ltd. and L&T Ltd.

Recommendations on Cement Industry :- For the development of the cement industry 'Working

Group on Cement Industry' was constituted by the Planning Commission for the formulation of X Five

year plan. The Working Group has projected a growth rate of 10% for the cement industry during the

plan period and has projected creation of additional capacity of 40-62 million tones mainly through

expansion of existing plants. The Working Group has indentified following thrust areas for improving

demand for cement,

(i) Further push to housing development programmes;

(ii) promotion of concrete Highways and roads ; and

(iii) Use of ready-mix concrete Highways and roads ; and




Further, in order to improve global competitiveness of the Indian Cement Industry, the Department

of Industrial Policy & promotion commissioned a study on the global competitiveness of the Indian

Industry through an organization of international repute, viz. KPMG Consultancy Pvt. Ltd. The report

submitted by the organization has made several recommendations for making the Indian Cement

Industry more competitive in the international market. The recommendations are under consideration.

The export of cement during 2002-03 and 2003-04 was 6.92 million tonnes and 9.00 million

tonnes, respectively. Export during April-December, 2004-05 was 7.32 million tonnes.

Growth rate of the cement industry, with 128 large and over 300 mini cement plants with

estimated annual installed capacity of 151.69 million tonnes and 11.10 million tonnes, respectively, has

been decelerating in recent years. However, indications for the current year suggest a better performance

by the cement industry.

Given the enormous need for infrastructure and housing, which require large quantities of

cement as a basic building block, the prospects of the industry are bright. This has been endorsed by

market developments such as mergers and acquisitions by both domestic and international players.

Keeping in view the trend of growth of the industry in previous years, a production target of 1330 lakh

tonnes has been fixed for the year 2004-05. During April-December, 2004-05 the production of cement

has been 962.95 lakh tonnes, which is 6.81 per cent higher than the production in the corresponding

period of last year.

The impressive performance of the cement industry, both in terms of production and export, continues.

Export of cement in 2003-04 and 2004-05 was 9 MT and 106 MT, respectively. During April-October

2005, exports were 5.10 MT. Installed capacity of production was augmented during 2004-05 and in

view of the growth trend in the last few years, a production target of 142.0 MT was set for the year

2005-06. During the period April to October 2005, production of 82.26 MT (provisional) has already

been achieved. This is 9.39 per cent higher than the production in the corresponding period of the

previous year. Efforts to generate adequate domestic demand to meet the excess production capacity

available with the industry are also being made.

Technological change :- Cement industry has made tremendous strides in technological up gradation

and assimilation of latest technology. At present ninety three per cent of the total capacity in the industry

is based on modern and environment-friendly dry process technology and only seven per cent of the

capacity is based on old wet and semi-dry process technology. There is tremendous scope for waste heat

recovery in cement plants and thereby reduction in emission level. One project for co-generation of

power utilizing waste heat in an Indian cement plant is being implemented with Japanese assistance

under Green Aid Plan. The induction of advanced technology has helped the industry immensely to

conserve energy and fuel and to save materials substantially. India is also producing different varieties

of cement like Ordinary Portland Cement (OPC), Portland Pozzolana Cement (PPC), Portland blast

Furnace Slag Cement (PBFS), Oil Well Cement, Rapid Hardening Portland Cement, Sulphate Resisting

Portland Cement, white Cement etc. Production of these varieties of cement conform to the BIS

Specifications. It is worth mentioning that some cement plants have set up dedicated jetties for

promoting bulk transpiration and export.




STRUCTURE OF THE INDUSTRY

Major Players

With an installed capacity of around 157 million tonnes per annum (mtpa) at end-March 2006,

large cement plants accounted for 93% of the total installed capacity in India. The installed capacity is

distributed over across approximately 129 large cement plants owned by around 54 companies.

The structure of the industry is fragmented, although, the concentration at the top is increasing.

The fragmented structure is a result of the low entry barriers in the post decontrol period and the ready

availability of technology. However, cement plants are capital intensive and require a capital investment

of over Rs. 3,500 per tonne of cement, which translates into an investment of Rs. 3,500 million for a 1

mtpa plant.

The cement industry has witnessed substantial reorganisation of capacities during the last couple

of years. Some examples of the consolidation witnessed during the recent past include: Gujarat Ambuja

taking a stake of 14% in ACC; Gujarat Ambuja taking over DLF Cements and Modi Cement; India

Cement taking over Raasi Cement and Sri Vishnu Cement; Grasim's acquisition of the cement business

of L&T; Indian Rayon's cement division merging with Grasim; Grasim taking over Sri Digvijay

Cements; L&T taking over Narmada Cements; ACC taking over IDCOL.

Multinational cement companies have also initiated the acquisition process in the Indian cement

market. Swiss cement major Holcim has picked up 14.8% of the promoters stake in Gujarat Ambuja

Cements (GACL). In January 2006, Holderind Investments (Holcim Mauritius), an indirect, wholly-

owned subsidiary of Holcim, acquired 200 million equity shares of GACL at a price of Rs.105 per share

from the promoters. Post-sale, the share of promoters in the company is 9%. Holcim also made an open

offer to acquire an additional 20% stake in GACL at Rs. 90.64 per share. Earlier, Holcim had entered

into a strategic alliance with GACL, and acquired a 67% controlling stake in Ambuja Cement India.

Through this holding company, Holcim acquired a majority in Ambuja Cement Eastern and a substantial

stake in ACC. Ambuja Cement India holds a 34% share in ACC and a 97% share in Ambuja Cement

Eastern. Holcim's acquisition has led to the emergence of two major groups in the Indian cement

industry, the Holcim-ACC-Gujarat Ambuja Cements combine (capacity of 33.5 mt) and the Aditya Birla

group through Grasim Industries and Ultratech Cement (combined capacity of 31.1 mt). Lafarge, the

French cement major, had acquired the cement plants of Raymond and TISCO in the recent past, and

has an installed capacity of 5 mtpa. Italy based Italcementi has acquired a stake in the K.K. Birla

promoted Zuari Industries' cement plant in AP, with a capacity of 3.4 mtpa. Recently, Heidelberg

Cement has entered into an equal joint-venture agreement with S P Lohia Group controlled Indo-Rama

Cement. Heidelberg Cement is expected to take a 50% controlling stake in Indo-Rama's grinding plant

of 0.75 mtpa at Raigad in Maharashtra.

As on March 2006, ACC was the largest player with a capacity of 18.64 mtpa. UltraTech

Cement Co Ltd. now occupies the second slot with a capacity of 17 mtpa (which includes 1.5 mtpa of

subsidiary Narmada Cement). The Gujarat Ambuja group has emerged as the third largest player with a

capacity of 14.86 mtpa. Grasim ranks fourth with a capacity of 14.12 mtpa. Other leading players

include India Cements, Jaypee group, Century Textiles, Madras Cements, Lafarge, and Birla Corp. The

relative market share of large players in the cement industry has changed significantly over the years.




Consolidation of capacities has seen UltraTech, Grasim, India Cement and Gujarat Ambuja emerge as

the leading players apart from ACC, which has been the market leader during all the years excepting

FY2001. All the players have resorted to a combination of greenfield capacities as well as takeover of

existing capacities for growth.

Declining Role of Public Sector

Historically, cement has been one of the most important areas of operations for the Indian private

sector. Unlike much of heavy industry and utilities, cement was not deemed to be the exclusive preserve

of the State sector in the post-independence development strategy. Cement was also the industry of

choice of many corporates diversifying away from the troubled traditional areas of jute and textiles.

Over the years, the share of the public sector in cement production has declined. While the

private sector (large companies) accounts for around 95% of the total installed capacity, the share of

public sector companies has declined from a level of 11% in FY1996 to around 4.4% in FY2006. The

share in production of the public sector companies is even lower at 1.2% in FY2006 as compared to

6.5% in FY1996.

Among cement public sector undertakings (PSUs), Cement Corporation of India (CCI), a central

PSU, is the leading player. It has 10 cement plants with a total installed capacity of 3.85 mtpa at end-

FY2006. Other PSU companies manufacturing cement include State entities such as UP State Cement

Corporation (3 units with total capacity of 2.16 mtpa); and Tamil Nadu Cement (2 plants with a total

capacity of 0.9 mtpa).

Given the extent of losses being incurred by most of these plants, restructuring and revival

through privatisation appears imminent. Accordingly, the Yerraguntla unit in Andhra Pradesh, which

belonged to CCI, was taken over by India Cements in FY1998. The three units of UP State Cement

Corporation have been closed since early 1998. These units were taken over by Jaypee Group in

FY2006.

SCALE OF OPERATIONS

As of end-FY2006, there were 7 plants with a capacity exceeding 3 mtpa at a single location, and

71 plants with a capacity exceeding 1 mtpa at a single location. Plants with a capacity exceeding 1 mtpa

at a single location had a cumulative installed capacity of 126.2 mtpa at end-FY2006, accounting for

80.3% of total installed capacity.

Importance to Economy

India is the second largest producer of cement in the world. In 2005, India produced 142 mt of

cement, accounting for 6.4% of global production of 2.22 billion tonnes. India is the second largest

producer-behind China (1,000 mt), but ahead of the US (99 mt) and Japan (66 mt). India's cement

industry-both installed capacity

and actual production-has grown significantly over the past three decades, with production increasing at

an average rate of 8.1% per year between 1981 and 2004-05.




In recent years, the cement sector has accounted for a declining share of gross bank credit (GBC)

of scheduled commercial banks (SCBs), largely because of decline in credit during FY2004. With GBC

of Rs. 61.12 billion in March 2005, the cement industry accounted for 1.67% of industry GBC of SCBs

in March 2005, as compared with 1.81% in March 2000.

DEMAND-SUPPLY POSITION

Robust Production Growth

India's cement production increased 11.2% during FY2006 to 141.81 mt. By comparison,

production increased 8.6% during FY2005, and 5.5% during FY2004. Production has increased at a 3-

year compound annual growth rate (CAGR) of 8.4%. On a decadal basis, India's cement production

increased at an annual average of 8.2% during FY1996-2006, as compared with 6.9% during FY1986-

96.

During FY2006, after the slack of the monsoon season, cement production registered high

growth since October 2005. High growth in the cement sector reflected robust demand from the

construction sector and high exports.

Cement production and consumption has strong co-relation with economic growth and industrial

activity.

As cement is a basic construction material with virtually no substitute, it is used worldwide for

all construction work. Thus, the growth in the construction industry has a direct relation with the

production and consumption of cement. GDP from the construction industry has grown at a high rate

over the last three years-12.1% during FY2006, 12.5% during FY2005, and 10.9% during FY2004. This

has had a positive impact on cement consumption, which increased 10.1% during FY2006, as compared

with 8.1% during FY2005.

The increased growth in cement consumption since 2004 has had a positive impact of the

capacity utilisation of cement producers. Capacity utilisation increased from 76% in FY2002 to around

90% in FY2006.

Low but Rising Share of Blended Cement in India

In India, about 44% of the cement produced is Ordinary Portland Cement (OPC), 47% is

Pozzolana Cement (PPC), 8% is Portland Blast Furnace Slag Cement (PBFS), and the remaining 1% are

special cements. Blended cement (PPC and PBFS) has a low but rising share of India's cement

production. Energy usage is significantly lower in blended cement because a portion of the clinker is

replaced by other materials such as fly ash or blast furnace slag. Blended cements are composite

cements produced by blending clinker -which is the output of the kiln- at the grinding stage with

pozzolonic or other material with cement like properties. Although compressive strength of the major

types of blended cement is equivalent to that of Grade 33 OPC cement; blended cement offers a

reduction in the risk of thermal cracking; superior performance under elevated temperature curing

conditions; good long-term strength; higher resistance to acids, sulphates and alkali attacks, with more

suitability for coastal areas; reduced permeability with consequent improvement in durability; smoother

finishing, etc.




In India, the share of blended cement in the total production had increased from 47% in 1978-79

to 76% in 1982-83. After this, the Indian cement industry witnessed a higher production of the higher

grade OPC, and the production of blended cement gradually declined to 27% in 1992-93. However, this

was followed by an upward trend, and the share of blended cement reached approximately 56% in 2004-

05.

Regional Production Patterns

The Indian cement industry is comprised of 129 large cement plants and 300 mini-cement plants,

with installed capacities of 153.6 mtpa and 11.10 mtpa, respectively at end-FY2005. The proximity of

coal deposits constitutes another important factor in cement manufacturing. Nearly 68% of the coal

required by the cement industry during FY2005 was transported by rail; the balance 32% was moved by

road.

There are at present seven clusters-Satna (Madhya Pradesh), Chandrapur (North Andhra Pradesh

and Maharashtra), Gulbarga (North Karnataka and East AP), Chanderia (South Rajasthan + Jawad &

Neemuch in MP), Bilaspur (Chattisgarh), Yerraguntla (South AP), and Nalgonda (Central AP)-with a

total capacity of 75.23 mtpa at end-March 2005, accounting for 48.4% of the total installed capacity.

AP is the largest cement producing state with an installed capacity of 24.9 mt. Cement

production during FY2006 was 19.9 mt. Other major cement producing states include Rajasthan,

Madhya Pradesh, and Gujarat.

In terms of regional concentration, the Southern region accounts for 32% of installed capacity,

followed by Western region. MP is traditionally considered a part of the Western region although as

much as 65% of cement output from this state serves the Northern and Eastern regions.

Major Players

As discussed, ACC is the largest player with a capacity of 18.64 mtpa at end-March 2006.

UltraTech CemCo Ltd. now occupies the second slot with a capacity of 17 mtpa (which includes 1.5

mtpa of subsidiary Narmada Cement). The Gujarat Ambuja group has emerged as the third largest

player with a capacity of 14.86 mtpa.

Grasim ranks fourth with a capacity of 14.12 mtpa. Other leading players include India Cements, Jaypee

group, Century Textiles, Madras Cements, Lafarge, and Birla Corp.

High Growth in Domestic Cement Consumption

India's cement consumption increased 10.1% during FY2006 to 135.56 mt. By comparison,

consumption 8.1% during FY2005, and 5.8% during FY2004. Production has increased at a 3-year

compound annual growth rate (CAGR) of 8%.

On a decadal basis, India's cement consumption has increased at a 10-year CAGR of 8.2%

during FY1996-06. Demand has largely been driven by a shift in housing construction preferences to

concrete and the rapidly rising population. The healthy growth beginning in FY2005 is also due to

increased demand from National Highway Development Projects (NHDP).

In India, the percentage of pucca houses in urban areas increased from 73% in 1991 to 75% in

2001, whereas the percentage of semi-pucca and kutcha houses in the urban areas has declined. The

percentage of pucca houses in rural areas increased from 31% in 1991 to 35% in 2001. This implies that

use of permanent building materials for the construction of walls and roofs is becoming more popular in




rural areas also. Data from the 58th Round of Survey by National Sample Survey Organisation (NSSO)

indicates that the percentage of pucca dwellings in urban areas increased from 74% in 1993 to around

77% in 2002-03. Over the same period, the percentage of pucca dwellings in rural areas increased from

32% to 36%.

Housing completions in urban areas in each decade has shown an increasing trend from 11.55

million in 1971-81 to 19.53 million in 1991-2001. Similarly, housing completions in rural areas has also

increased from 19.16 million to 25.61 million. Apart from increased preference for pucca constructions,

housing size has also increased in urban areas. Overall, while the share of 1-room houses has declined

from 45% in 1981 to 39% in 2001, the share of 3-or more rooms has increased from 27% to 32%.

In India, cement consumption and sales follows a seasonal pattern with lean sales during the

monsoon season (July-September) and higher sales during October-March. In terms of regional

consumption, the Southern region accounted for 29% of the total consumption of approximately 135.6

mt during FY2006, followed by Northern and Western regions. Although, there has been an year to year

variation in the region-wise consumption growth rates, the relative shares of each region has more or

less remain stable across the past few years.

Regional disparity has been witnessed in the consumption growth. During FY2006, the Southern

region witnessed the strongest consumption growth, driven by higher construction activities from both

Government and private sector projects. By comparison, while consumption in Western region increased

5.4% during FY2006, consumption in Central region increased only 0.8%.

The major consumption states for cement in India include Maharashtra (16.8 mt in FY2006), UP

(14.2 mt), Andhra Pradesh (11.5 mt), and Tamil Nadu (11.1 mt). Over the last three years, consumption

growth has outpaced the national average in Andhra Pradesh, Haryana, Rajasthan, and Karnataka.

Exports

The Indian cement industry exported around 6 mt of cement during FY2006, accounting for

around 4% of the total production. There has been a significant year on year variation in the export

trend, implying that Companies rely on cement exports to balance out the domestic demand supply

situation. Because of increased overseas demand, cement exports increased from 4.07 mt in FY2005 to

6.01 mt during FY2006. However, increased domestic demand resulted in clinker exports declining from

5.99 mt to 3.18 mt.

As cement is a low value, high bulk commodity, freight cost becomes a significant factor in

determining the landed cost of cement. This has resulted in a very low volume of international trade in

cement. World cement trade has averaged just around 6-7% of the total production.

The export performance of Indian Cement industry has been healthy in recent years and has

witnessed growth at a CAGR of 20.1% during FY2004-06. During FY2006, cement exports were higher

by 47.7%. There has been a significant year on year variation in the export trend, implying that

companies rely on cement exports to balance out the domestic demand supply situation.




Demand-Supply Position

Overview

The cement industry has been in a surplus position since a long time. This has resulted in

increased exports over the last few years. Although there exists a surplus of cement in the country, the

surplus has declined from 0.42 mt in FY2005 to 0.23 mt during FY2006, mainly because of higher

growth in consumption. This has resulted in capacity utilisation increasing from 84% in FY2005 to 90%

in FY2006.

India's annual per capita cement production of 0.13 tonnes in FY2006 is significantly below the

world average of 0.3 tonnes and China's production of 0.76 tonnes during 2004. It has been observed

that cement consumption increases along with the rise in per capita income in developing countries.

As per present expansion plans, an additional 6.6 mtpa of capacity is expected to be operational

in FY2007. Considering an expected production and consumption growth of 10% during FY2007, the

demand supply position of the Indian cement industry is expected to improve.

Regional Position

There exist regional surplus/shortages in the Indian cement industry. The table-10 details the

region-wise production and consumption of cement.

As can be seen from the table, South India leads in both cement production and consumption.

While demand in the eastern region is primarily driven by the housing sector; infrastructure, investments

in industrial projects and the housing sector (in varying proportions) have propelled demand in the

western, northern and southern regions. The oversupply is largely in the Southern and Northern regions.

By contrast, there is a supply shortage in Eastern and Western regions.

PRICES

The regional variations in the Indian market has resulted in the cement prices across regions witnessing

movement within a band, with no appreciable increase in any region. Differences in regional demand

supply situation has translated into price differences across regions. Prices are lower in Southern

regions where there is normally a supply surplus. However, prices are higher in Eastern and Western

regions where shortages exist.

The surplus position had resulted in significant pressure on price realisations in recent years. The

cyclical trough in the late-1990s had a severe impact on the industry financials and many companies

were referred to BIFR. However, cement prices have firmed up during the last few years due to

improvement in demand-supply position and increasing consolidation in the industry. The Wholesale

Price Index (WPI) for cement increased 3.9% during FY2005, as compared with a growth of 1.2%

during FY2004. The WPI for March 2006 was 11% higher than the WPI for March 2005.

NEW/EXPANSION PROJECTS

During FY2007, ACC plans to expand capacity at its Rajasthan plant from 0.6 mtpa to 1.6 mtpa

at a cost of Rs. 4 billion. It is also expected to invest in expansion of grinding capacities at

various plants. With these brownfield expansions, the company's installed capacity is expected to

increase by around 2 mtpa in FY2007.




Grasim Industries is planning to expand capacity by 8 mtpa in both greenfield and brownfield

projects in Rajasthan at an estimated cost of Rs. 24.75 billion.

Madras Cements is planning to set up a 2 mtpa greenfield unit in TN at a cost of Rs. 6.12 billion,

and an additional clinker facility at its existing plant in AP at a cost of Rs. 4.39 billion. The

clinker facility is expected to result in increase in cement production capacity at its AP unit from

1.6 mtpa to 3.6 mtpa. The new unit

and the clinker facility are expected to be operational during Q4FY2008 and Q2FY2008,

respectively.

India Cements plans to set up a 2 mtpa plant in HP at a cost of Rs. 7.5 billion. The plant is

expected to be operational in 2010-11. India Cement is also expanding capacity at its existing

plants by 2 mtpa.

Shree Cement plans to set up a new 1.5 mtpa plant at Rajasthan at an approximate cost of Rs. 4

billion. The plant is expected to be operational by FY2008.

OCL India plans to increase its capacity by 2.4 mtpa at its existing plant in Orissa at an

investment of Rs.7 billion. The project is expected to be commissioned by September 2009.

Gujarat Ambuja group company-Ambuja Cement Eastern-is expanding capacity at its clinker

unit in Sankrail, West Bengal at an investment of Rs. 8 billion. It is also setting up a greenfield

plant in West Bengal. Post-completion by end-FY2007, the company's installed capacity is

expected to increase from 2 mtpa to 3 mtpa.

Heidelberg Cement plans to expand its capacity to 5-10 mtpa over the next three years.

Lafarge is planning to expand capacity by 2 mtpa at its Sonadih plant in Chattisgarh.

Binani Cement plans to increase capacity by 2 mtpa at its cement plant in Sirohi, Rajasthan.

The Jaypee group plans to invest Rs. 30 billion by 2007 to increase capacity from 6.5 mtpa to 15

mtpa.

OUTLOOK

The cement sector is expected to witness strong production and consumption growth of 10%

during FY2007 in line with the economic growth because of the strong co-relation with GDP and the

increased activity in the construction sector. Future drivers of cement demand growth in India would be

increased spending on road and housing projects. The Union Budget for FY2007 has provided further

thrust to the infrastructure sector through several initiatives, such as:

Budget support on the National Highways Development Programme (NHDP) increased from

Rs. 93.20 billion in 2005-06 to Rs. 99.45 billion in 2006-07. The NHDP envisages an

investment of Rs. 2,200 billion on concessions/contracts to be awarded by 2012;

Special accelerated road development programme for the North Eastern region at an estimated

cost of Rs.46.18 billion has been approved. The Government has also decided to develop 1,000

kms of access controlled Expressways.

'Bharat Nirman' to focus on 6 components of rural infrastructure including irrigation, roads,

water supply, housing, rural electrification and rural telecom connectivity.

Outlay on `Bharat Nirman' increased from Rs. 121.60 billion to Rs. 186.96 billion.




Increase in outlay from Rs. 45 billion to Rs. 71.21 billion with the objective of improving the

pace of implementation of irrigation projects.

The housing sector, which accounts for around 55-60% of total demand, is likely to continue to

be the driving force behind cement demand. It is estimated that requirement of new dwelling units over a

period of 25 years (1996-97 to 2020-21) will be around 140 million units requiring an investment of

approximately Rs. 20,000 billion. Besides demand from infrastructure projects and

industrial/commercial ventures account for 20% each. Even as NHDP-I (comprising the Golden

Quadrilateral or GQ and North-East-South-West or NESW) near completion (GQ by end-2006, and

NESW by 2009), demand in the port and airport segments may pick up, keeping demand buoyant.

Further, NHDP-III to NHDP-VII (2006-15) envisages construction of another 36,000 kms of roads at an

estimated cost of Rs. 1,270 billion.

Overall, from the demand perspective, the fundamentals look bright, and cement demand in the

medium term is expected to grow by around 9%. The Planning Commission's Working Group on

Cement Industry predicts cement production in India to grow at a rate of 10% during the Tenth Five-

Year Plan (2002-2007). By comparison, the cement industry is expected to grow at around 8-10%

during the 2003-07 period. Growth of 9% per annum from FY2006-10 would result in cement

production increasing to around 196 mt in FY2010. By comparison, consumption could increase to 190

mt in FY2010. China, the world's largest producer of cement, has seen sustained cement production

average annual growth of 10% since 1980, mostly due to the enormous infrastructure development that

country has experienced over this period.

Conclusion

Cement is key factor in economic development. The industry has tremendous potential for

development a limestone of excellent quality is found almost throughout the country.

The major problem faced by the cement industry in recent years, as indicated already, were

inadequate and erratic supply of coal mainly due to poor availability of rail wagons, increase in coal

prices following partial deregulation, poor quality of coal and frequent power cuts in major. Cement

producing states like Rajasthan, Andhra Pradesh, Karnataka, Madhya Pradesh Gujarat and Kerala.

We may also refer, in this connection, to the ambitious modernisation/expansion programmes of

the cement industry which include conversion of manufacturing process, energy conservation of

measures adoption of latest technologies such as pre-heaters and pre-calcinators, installation pollution

control devices, setting up of captive power units, etc. The Government is also encouraging the setting

up of coal washeries and captive power plants to solve the problems of poor quality of coal and power

shortage. A very interesting pilot project for transportation of bulk cement is being set up at Kalamboli

New Bombay in order to switch over gradually from the traditional movement of cement in bags to

modern and efficient mode of transportation and distribution in bulk.




Annexure

Table. 1 Cement Statistics: Production, Consumption and Prices

Month Prodn.

(Lakh

tonnes)

Prodn.

(% chg.)

Consumption

(Lakh

tonnes)

Consumption

(% chg.)

Prices*

(Rs./50kg)

Prices*

(%

chg.)

Oct.

2003

94.20 6.24 87.34 2.73 156 9.47

Nov.

2003

91.80 3.85 89.40 4.78 160 -3.03

Dec.

2003

100.70 4.96 96.30 5.15 165 0.92

Jan. 2004 102.40 7.09 99.68 7.30 173 6.46

Feb.

2004

103.40 10.96 100.09 11.65 172 5.85

Mar.

2004

112.60 3.52 109.92 5.99 176 7.01

Apr.

2004

106.40 17.31 100.49 15.27 174 5.45

May.

2004

104.50 -1.61 99.44 -4.46 175 6.06

Jun.

2004

98.00 -4.11 96.26 -2.37 174 10.48

Jul. 2004 102.70 9.02 97.02 8.57 172 10.65

Aug.

2004

88.54 1.19 84.61 -0.12 170 11.48

Sep.

2004

98.40 11.69 96.87 11.15 167 11.33

Oct.

2004

107.50 14.12 102.47 17.32

Apr-Oct Apr-Oct Apr-Oct Apr-Oct Apr-Set Apr-Set

2003-04 664.10 5.09 638.42 4.20 158 5.94

2004-05 706.00 6.31 679.35 6.41 172 9.15

Apr-

Mar

Apr-

Mar

Apr-Mar Apr-Mar Apr-Mar Apr-

Mar

2003-04 1174.40 5.47 1137.92 5.77 162 5.10

*Wholesale prices in the Mumbai Market.

Source: CMIE DEC- 2004




Table – 2 Production of cement

Year Production (in lakh tonnes) Growth rate

1999-2000 982 11.72

2000-01 976 (-) 0.61

2001-02 1069 9.52

2002-03 1164 8.88

2003-04 1235 6.09

Source : Department of Industrial policy and Promotion.

Table – 3 Production of cement

Year Production (in lakh tonnes) Growth rate (in per cent)

2000-01 976.10 (-) 0.61

2001-02 1069.00 9.52

2002-03 1163.50 8.84

2003-04 1235.00 6.15

2004-05 1335.70 8.15

Source : Department of Industrial policy and Promotion.

Table -4 Highlights of Indian Cement Industry

As on 31st March, 2006

Large Plants

(Large Plants means capacity more than 0.198 Mn T. per annum)

Companies (Members) (Nos.) 52

Cement Plants (Nos.) 130

Installed Capacity (Mn.t.) 160.24

Cement Production (Mn.t.) 2005-06 141.81

Plants with Capacity of Million tonnes and above (Nos.) 76

Manpower Employed (Nos.) Approx. 1,35,000

Turnover in 2005 (Mn. US$) around 9,700

Mini Plants

(Mini Plants means capacity less than 0.198 Mn. T. per annum)

Cement Plants (Nos.) 365

Installed Capacity (Mn.t.) 11.10

Cement Production (Mn.t.) 2005-06 6.00(P)




Table -5. Market Share of Leading Cement Producers

FY 2001 2002 2003 2004 2005 2006

The Associated

Cement

Companies

Limited

11.2% 12.2% 12.8% 13.5% 13.0% 12.6%

UltraTech CemCo

Ltd.

11.9% 11.1% 10.5% 10.1% 10.1% 9.7%

Gujarat Ambuja

Cements Limited

10.6% 8.7% 9.5% 10.1% 11.3% 10.6%

Grasim Industries

Limited.

9.2% 10.3% 10.9% 10.9% 10.3% 10.3%

Century Textiles

and Industries

Limited

5.4% 5.0% 4.8% 4.8% 4.8% 4.7%

Birla Corp Limited 4.2% 4.0% 4.1% 4.1% 3.9% 3.6%

The India Cements

Limited

7.3% 5.8% 5.4% 5.4% 5.1% 5.9%

Jaiprakash

Industries Limited

2.3% 3.9% 3.8% 3.6% 4.3% 4.5%

Lafarge 3.8% 3.8% 3.4% 3.2% 3.4% 3.2%

Others 34.1% 35.2% 34.8% 34.3% 33.7% 34.8%

Total 100% 100% 100% 100% 100% 100%

Table - 6 Regional Distribution of Capacity and Production

Million tonnes Share of total

FY 2004 2005 2006 2004 2005 2006

Capacity 144.30 151.34 157.15 100 100 100

North 25.97 27.36 27.36 18.0 18.1 18.8

East 22.38 22.81 22.85 15.5 15.1 14.5

South 46.27 48.06 50.76 32.1 31.8 32.3

West 27.98 28.92 28.94 19.4 19.1 18.4

Central 21.70 24.20 25.00 15.0 16.0 15.9

Production 117.50 127.57 141.81 100 100 100

North 25.22 26.70 30.17 21.5 20.9 21.3

East 16.67 18.73 19.54 14.2 14.7 13.8

South 36.13 38.98 44.88 30.8 30.6 31.7

West 21.00 22.76 24.93 17.9 17.8 17.6

Central 18.48 20.39 22.28 15.7 16.0 15.7




Table - 7 Major Players in Indian Cement Industry

Thousand tonnes

FY2005 FY2006

Installed Capacity Production Installed Capacity Production

ACC 18,228 16,606 18,640 17,902

Gujarat Ambuja 14,570 14,467 14,860 15,094

Ultratech 17,000 12,921 17,000 13,707

Grasim 14,115 13,143 14,115 14,649

India Cements 8,810 6,506 8,810 8,434

JK Group 6,415 5,769 6,680 6,174

Jaypee Group 5,600 5,429 6,531 6,316

Century Textiles 5,900 6,070 6,300 6,636

Madras Cements 5,470 3,663 5,470 4,550

Birla Corp. 4,780 5,017 5,113 5,150

Lafarge 5,000 4,391 5,000 4,573

Others 45,456 33,589 48,627 38,620

Total 151,344 127,571 157,146 141,805

Table - 8 Housing Stock in India

Million units

1981 1991 2001

Units % of total Units % of total Units % of total

Urban 27.20 100 39.40 100 52.06 100

Pucca 17.60 64.7 28.66 72.7 38.89 74.8

Semi-Pucca 5.93 21.8 6.97 17.7 9.49 18.2

Kutcha 3.67 13.5 3.77 9.6 3.68 7.0

Rural 87.20 100 109.00 100 135.10 100

Pucca 19.65 22.5 33.34 30.6 47.78 35.4

Semi-Pucca 32.20 36.9 38.86 35.6 49.65 36.7

Kutcha 35.35 40.5 36.80 33.8 37.67 27.9

Total 114.40 100 148.40 100 187.16 100

Pucca 37.25 32.6 62.00 41.8 86.67 46.3

Semi-Pucca 38.13 33.3 45.83 30.9 59.14 31.6

Kutcha 39.02 34.1 40.57 27.3 41.35 22.1




Table -.9 Regional Distribution of Cement Consumption

Million tonnes Share of total

FY 2004 2005 2006 2004 2005 2006

North 22.86 24.26 27.06 20.1 19.7 20.0

East 17.48 20.40 22.66 15.3 16.6 16.7

South 32.03 33.43 39.37 28.1 27.2 29.0

West 22.52 24.59 25.91 19.8 20.0 19.1

Central 18.97 20.41 20.57 16.7 16.6 15.2

Total 113.86 123.08 135.56 100 100 100

Table -10 Regional Capacity, Production, and Consumption of Cement

mt

FY2006 FY2005

Capacity Production Consn. Supply Capacity Production Consn. Supply

Surplus Surplus

North 29.59 30.17 27.06 3.11 27.36 26.70 24.26 2.44

East 22.85 19.54 22.66 -3.12 22.81 18.73 20.40 -1.67

South 50.76 44.88 39.37 5.51 48.06 38.98 33.43 5.55

West 28.94 24.93 25.91 -0.98 28.92 22.76 24.59 -1.83

Central 25.00 22.28 20.57 1.71 24.20 20.39 20.41 -0.02

Total 157.15 141.81 135.56 6.25 151.34 127.57 123.08 4.49




REFERENCES

1- Indian Economics by Sudhir Dawra page no- 406-407

2- Indian Economics by K.K. Dewett, J.D. Verma and M.L. Sharma page no. 208, 211, 279-281, 605.

3- Indian Economics by Dr. R.K. Agarwal page no. 274, 321, 333-350

4- Pratiyogita Darpan (Extra Issue)

5- Indian Economy 2004-05 page no- 77, 87-90

6- Indian Economy by Ruddar Dutt and Sundharam page no- 603

7- Globalisation and Development Experiences by Debendra K. Das page no- 3,4, 397-399, 435

8- Globalisation of Indian Economy:A swot analysis by C. Lakshmi Narayana Pillay, page no- 28, 245

9- Liberalisation Economic Challanges by A.P. Gupta, S.K. rivastava. page no- 248, 36-37.

10- Evalution of Indian Economy by T.R.Jain, Dr. V.K. Ohri.

11- Indian Agriculture-2003 by Vikas Singhal page no- 772-793

12- www.India Budget.nic.in

-Economic Survey 2004-05 page no- 144-146, 153-154

-Economic Survey 2005-06 page no- 140-148

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13- The Times Of India, 11 Sep. 2005, page no- 12

14- www.cmaindia.org

15- Ministry of Food, Government of India

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17- ISMA and CRIS- INFAC

18- VSDA Foriegn Agricultural Service.

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12-13.

20- Technology of Portland Cement and Blending Cement (Second Edition) by H.N. Banerjee, page

no- 1, 2-8, 53, 61-64

21- www.ibef.org

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